Positions startup for more significant funding

Jul. 3, 2013

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CitiLogics a regional startup

CitiLogics was part of UpTech’s first class year. UpTech is the Northern Kentucky accelerator designed to identify and grow information technology companies in the region.

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CitiLogics, the local startup that’s building analytical software to help municipal water systems efficiently manage water supply and infrastructure, has been awarded a $150,000 Small Business Innovation Research grant from the National Science Foundation.

The Phase I grant, which brings CitiLogics’ funding to $800,000, is an inflection point for the startup that formed in 2009, and positions it for more substantial funding. CitiLogics now has six months to demonstrate the scientific, technical and commercial potential of its software that leverages existing data through modeling and analytics to help municipalities manage and operate largely hidden water infrastructures.

It also situates CitiLogics to become a player in local efforts to create a global water technology hub and commercialize ongoing research. The region is considered a national leader in water technology, and a recently formed group of experts called Confluence is working to leverage local assets doing water research including the University of Cincinnati, Procter & Gamble and General Electric.

CitiLogics’ goal is to give water utilities across the country a much clearer picture of the approximately 880,000 miles of piping and other infrastructure buried under ground, and help them better manage water loss, water quality and water security.

“The future is bringing in real-time data and the capability to analyze those data and identify where problems could happen before they really happen,” said Biju George, interim director of Greater Cincinnati Water Works. “CitiLogics is better than anything I’ve seen in the market place.”

CitiLogics is currently testing its software with partners including Greater Cincinnati Water Works and the Northern Kentucky Water District. In six months, it can apply for a $750,000 NSF Phase II grant, which would give the company two years to further develop its products.

CitiLogics is currently in its second iteration. Co-founders Jim Uber and Stu Hooper initially positioned CitiLogics as a consulting firm specializing in water security, which received increased focus in the wake of the 9/11 attacks. Uber is a University of Cincinnati environmental engineering professor, and Hooper is an environmental engineer with extensive business experience.

The company pivoted two years ago with the addition of co-founder Sam Hatchett, an environmental engineering PhD student at the University of Cincinnati who has deep experience with designing and implementing computer software. Hatchett came here seven years ago.

Hatchett’s research centers on using technology to turn water utility data into actionable information, and has involved plenty of research papers and grant writing. Hatchett and Uber, who connected at UC, didn’t want that work to end up sitting on a library shelf.

“We had this company going on, then Sam and I had a conversation, and we just said, ‘Maybe we need to be a little bit more entrepreneurial about this,’ ” Uber said.

Uber, Hooper and Hatchett shifted CitiLogics’ focus toward real-time data analytics. The target market is 10,000-plus water utilities across the country working to manage their water assets more efficiently, make smart capital investments and reduce costs.

In Cincinnati, there are more than 3,000 miles of water pipes buried underground, George said. But even the most advanced water utilities can’t know the state of their entire infrastructure at any given point in time.

As a result, water utilities frequently replace pipes based on age, in addition to obvious need. The lack of precise knowledge makes it impossible to leverage the full life of their assets, and difficult for utilities to demonstrate a return on investment to taxpayers.

The EPA estimates $384 billion will be required to maintain our nation’s water systems over the next 20 years.

“That’s one place where the analytics are needed. It’s in risk management, being able to stand up and demonstrate that you’re being responsible with money and spending it in a very efficient way,” Uber said.

One of CitiLogics’ core products, Polaris, leverages a software system that Hatchett built in conjunction with the Environmental Protection Agency called EPANET-RTX. That system allows water districts to integrate raw operational data into infrastructure planning models and make better decisions.

Polaris is designed so that any municipality can plug into EPANET-RTX and analyze the appropriate data to identify problems and opportunities. For instance, a large municipality can determine how much water it’s pumping in its service area that’s not being billed, which is called non-revenue water. Or a municipal that wants to better align the supply and demand for fresh water can analyze potential distribution changes and avoid problems before they actually happen.

That water utilities haven’t been able to do those things stunned Hatchett, and has inspired his software design, which CitiLogics is counting on to scale its model nationally.

“There does not exist a system in water utilities where you get a readout on the current state of the system, a simulation of all the flows in every pipe, the water quality, the chemistry,” Hatchett said. “And that just floored me.”